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Trading in Fast Moving Markets

In this article, I will explain why the cliché’, “be careful what you wish for”, pertains to trading in this environment with increased movement and volatility. With the expansion of the wider than ‘usual’ movements in what seems like any and all financial instruments across the globe and from talking to our international clients a lot more than usual, it seems more and more traders and ‘swing traders’ (I do both) are having increasingly more trouble holding on to profits and sticking to their disciplines. If any my previous quotes/clichés/lessons etc. make any sense or not, I can accept that. I am just trying to paint a clearer picture and mostly repeat things that I have heard through the years; but if I hold any one of them, and it is my mantra which I trade by and actually came from arguably the biggest COFFEE trader in the country (whose life is predicated on the weather as well) and it is this…”the markets are greater than us all”.

Much like how fishermen respect the ocean. I am no fisherman but I have heard that some of the best fishing is before and after a storm. he most seasoned fishermen anticipate a storm, prepare through experience, have a plan and once they are satisfied, they count their bounty. Only the novice and desperate ones stay out longer than they should…It’s the same as traders. You have to take what you can get and be humble…….personally, that what gets me up every morning, and I STILL am, as excited as a rookie. My peers at Tradeview see this and so do my clients. You can do 99 things right throughout the day but it only takes 1 thing to give it all back and that’s why I go back to my “the markets are greater than us all”. We are only as good as our last trade.

As mentioned above when volatility, like it is now, has increased and has stayed volatile longer than usual. I actually think this is more detrimental to traders even though there is ample opportunity to make more money. Some reasons are obvious and some are not but what I have found by talking to some of TradeviewMarkets retail clients is that many are making more money and having wider P&L swings than usual. Bravo.

Our traders and clients now have a higher win % than they usually do (this comes from timing the markets because when you are right you are right with all in wide futures moves). What is alarming is that their average LOSER far outweighs their average winner. Why is that?

Common trader mistake…..sell winners and hold losers. I fell into that trap late last week which upset me so much that for the first time since I can remember, I had to take a couple of days off. (Side note: had nothing to do with losing $ on the trade which was nominal….symbol was $XON on NYSE by the way). Last Thursday, I bought a bunch of biotech stocks, much like many did which were due to ‘bounce”…and they did. Some stocks I bought WERE not holding up the best and in fact were beaten down the most and I urge to take a look at these charts ( HZNP HRTX ESPR NVAX BIB IBB….XON). So in these conditions, when things turn, as they did, you really never have enough. So they bounced and violently. Except for one and the stock was $XON which some have dubbed the AAPL of the biotech world and down 50% off its high from just a couple months ago. I have no idea what they do by the way and it didn’t matter because the price action told me it was a dog. As I unloaded my stocks mentioned above, I made a crucial mistake. Instead of adding to my winners, which were nominal in size, I sold them and sat with a large position in $XON.

I won’t get into it because now I am getting upset again but what happened to me happened to our clients and it’s that they timed the market right, on smaller positons, and added to the weaker one(s) in hopes that somehow I am the only one watching this stock but as I have said in many of my webcasts, in wide ranging futures moves, stocks show their hand way more than in any trending market or sector rotation.

It happens and I am done beating myself up but my point of the article is that in any extreme circumstances, usually extreme actions are taken and that is human nature I guess; but I will handle it like this for now on. If I stick to what got me here and hold to my disciplines, I won’t have crazy P&L fluctuation….I will just make more than I usually do and will hope the volatility stays longer than normal. Trade well!

MICHAEL VENEZIA

Tradeview Ltd. is not a portfolio manager or an investment advisor. This Market Report is for informational purposes only. Any statements made or opinions voiced in this Market Report do not constitute investment advice. The Tradeview Ltd. Market Report does not constitute a solicitation to buy or sell in the financial markets. Although the information contained in the Market Report comes from trusted sources, Tradeview Ltd. is not responsible for guaranteeing the accuracy, timeliness, completeness, or fitness of such sources. Tradeview Ltd. shall not be responsible for and disclaims all liability for any losses which may be suffered from access and use of the contents of the Tradeview Ltd. Market Report. Trading any financial instrument on margin, using leverage or otherwise involves considerable risk. Therefore, before deciding to participate in any style of trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Consulting with your investment counselor, attorney, accountant or other professional upon whom you rely for guidance as to the appropriateness of an investment in any style of trading is recommended.

Tradeview Ltd.

Is licensed to carry on securities investment business and is regulated by the Cayman Islands Monetary Authority (CIMA) as a full securities broker-dealer. Tradeview conducts business pursuant to the Cayman Islands Securities Investment Business Law (SIBL) and its activities fall under the direct supervision of the Investments and Securities Division of CIMA.
Headquarters: 5th Floor Anderson Square, 64 Shedden Road, Georgetown, Grand Cayman, Cayman Islands KY1-1002, BWI.
Website: www.tradeviewforex.com

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Is licensed and regulated by the Labuan Financial Services Authority (FSA) as a Money Broker, registration number LL15870 licensed to facilitate transactions in foreign exchange pursuant to Labuan Financial Services and Securities Act 2010, the Labuan Companies Act 1990 and the Labuan Business Activity Tax Act 1990.
Headquarters: International Business Financial Centre at Office 5, Jamie Business Center I, Unit F10, First Floor, Paragon Labuan, Jalan Mustapha, 87000 Labuan F.T.
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Is licensed as a Category 2 Investment Service Company and is regulated by the Malta Financial Services Authority (MFSA). The Malta Financial Services Authority (MFSA) is the single regulator for financial services in Malta. MFSA is a fully autonomous public institution and reports to Parliament on an annual basis. The MFSA is a member of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the International Organization of Securities Commissions (IOSCO) and is a signatory of the Multilateral Memorandum of Understanding with other European regulatory Institutions. Tradeview is authorized to provide financial services across multiple asset classes and is passported in the EU/EEA under MiFID II (EU Markets in Financial Instruments Directive).
Headquarters: 157 Archbishops Street, Valletta VLT Malta 1440.
Website: www.tradeview.eu

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Is authorized to conduct business pursuant to and in compliance with the General Law of Companies (LGS) promulgated by the government of Peru. Tradeview Financial Markets S.A.C is registered with the National Superintendence of Public Registries (SUNARP), company number 13089531. Tradeview Financial Markets S.A.C provides financial services in selected OTC derivative markets in compliance with all applicable government regulations.
Headquarters: Los Mirtos 239 Urb. San Eugenio, Lince, Lima, Perú.
Website: www.tradeviewlatam.com